(binned per thread starter's request) FX Option calculation

Quoting Mingary

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{quote} What is the payout when you win, what is the payout when you lose ?

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Quoting Harp

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{quote} I am not sure what the payout has to do with it being a scam. However, you will lose 100% of what you invested to gain 75 % - 85%. Unlike forex, in binary you can't lost more than what you invested. I have also noticed that the spot forex feature at binary brokers are pretty good being as you can control your risk exposure much more. If you are implying that binary is a scam because the payout is less than what you risk then that wouldn't be a fair assessment.

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Quoting Mingary

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{quote} "binary is a scam because the payout is less than what you risk" A scam, yes absolutely. "you will lose 100% of what you invested to gain 75 % - 85%." You have to be so much more right than wrong just to break even .. (:

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Quoting Harp

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{quote} I am sorry but a scam isn't defined by payouts. What do you say about the traders who risk 1% and allow the same trade to go 20% in red? Maybe we should call that person a scam teader because he is earning less than he risked. Mingary please have a look at the definition of a scam as you clearly are mistaken as to what it is. P.S. - Regular brokers have the ability to reroute your order to go against their book. Meaning that if you lose your wager they make profit from taking the other side. However, that isn't a scam being as it is legal...

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Quoting Mingary

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{quote} Can't you see that the odds are stacked against you ? Your transaction cost is enormous.

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Quoting Harp

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{quote} Odds? I don't see the odds at all. Wouldn't the system he or she use with the broker be a good measuring stick for "odds"? A person who wins 90% of the times has a much better odd of winning then someone with a lower win rate. The number is then swayed if martingale is added in. The broker gives you the pistol and the bullet. You decide what to aim for and how to use the bullets.

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Quoting Mingary

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{quote} Membership Revoked ?? I get it now .. IQ OPtion... well that did not last long IQ Option = Scam

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Quoting Sis.yphus

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{quote}Just curious, how did you come about that calculation?

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Quoting JR97

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99% of the way there. The one thing that will be key for accurate pricing is updated IV. Live updating HV might be a decent enough of a substitute, but we'll see next week when the markets are going. I'm tempted to screen scrape IV and feed it through a http request. Not sure how well mql4 handles http requests. Otherwise, just a simple data entry into the parameter will work. While I'm at it, I might output all of the greeks. Not sure how useful those would be to spot or even binary trading. But something to geek out on, I guess.

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Quoting GoldTheHun

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{quote} Hi Sis.yphus, Since ATR is mostly based on High and Low relationship between candles

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// The Black and Scholes (1973) Stock option formula
double BlackScholes(double S,double X,double T,double r,double v)
  {
   double d1,d2,callDelta;
   d1=(log(S/X)+(r+v*v/2)*T)/(v*sqrt(T));
   d2=d1-v*sqrt(T);
   
   callDelta=CND(d1);
//return S *CND(d1)-X * exp(-r*T)*CND(d2);
   return(callDelta)*100;
  }
 
// The cumulative normal distribution function 
double CND(double X)
  {
   double L,K,w;
   double const Pi = 3.141592653589793238462643;
   double const a1 = 0.31938153, a2 = -0.356563782, a3 = 1.781477937;
   double const a4 = -1.821255978, a5 = 1.330274429;
   L = fabs(X);
   K = 1.0 / (1.0 + 0.2316419 * L);
   w = 1.0 - 1.0 / sqrt(2 * Pi) * exp(-L *L / 2) * (a1 * K + a2 * K *K + a3 * pow(K,3) + a4 * pow(K,4) + a5 * pow(K,5));
   if(X<0)
     {
      w=1.0-w;
     }
   return (w);
  }